Prepared by:

Ms. Roda A. Gonzales, MBA, LPT

▪ Risk, according to UNWTO, is a situation that exposes someone
or something to danger or loss.

▪ Risk can be a physical safety matter , a risk of property loss or

a financial business risk.

▪ From the moment a person engages himself in the business of

tourism and hospitality, whether a sole proprietorship,
partnership, or corporation, the risk immediately attaches.
▪ The business dictionary has defined risk as the probability of
threat of damage, injury, liability, or any other adverse
occurrence that is caused by external or internal
vulnerabilities, and that may be avoided through preemptive
action.

▪ In the point of view of economics, risk implies future uncertainty

about deviation from expected earnings or expected outcome.
Risk measures the uncertainty that an investor is willing to take
to realize a gain from an investment.
▪ Hazard pertains to any source of potential damage, harm or
adverse health effects on something or someone, while risk is
the chance or probability that a person will be harmed or
experience an adverse health effect if exposed to a hazard.

▪ According to workSMARK, a hazard is something that can cause

harm while risk is a chance that any hazard will cause harm to
somebody.
▪ Risk Management, (as defined in ISO3100), is the
identification, evaluation, and prioritization of risks. It is
followed by coordinated and economical application of
resources to minimize, monitor, and control the probability of
unfortunate events to achieve the desired output.
Risk can come from different sources like the following:
1. Uncertainty in financial markets;
2. Threats from project failures (at any phase in design,
development, production, or sustainment life-cycles);
3. Legal liabilities;
4. Credit risk;
5. Accidents;
6. Natural causes and disasters;
7. Deliberate attack from an adversary; or
8. Events of uncertain or unpredictable root cause
Risk Management as Applied to Safety, Security and Sanitation - THMN04H
Risk Management in tourism and hospitality industry is a two-
way process:

1. The safety of the guests and employees, which includes

avoidance to emotional and physical harm is a moral and
ethical responsibility of the operators;

2. Protection to business operations which includes protection

against damage to property persons and property and future
litigation.
Credit is another source of risk that could impact the tourism
and hospitality industries.

Credit Risk is the potential that a bank borrower or

counterparty will fail to meet its obligation following agreed
terms. (As defined in Principles for the Management of Credit Risk)

The goal of credit risk management is to maximize a bank’s risk-

adjusted rate of return by maintaining credit risk exposure within
acceptable parameters.
▪ Risks and accidents are sometimes being used
interchangeably, but they are different, though they
complement each other.

▪ Accidents are reactive while risks are preventive.

▪ Accident management is necessary to reduce costs pertinent to

the accident, to wit: damage to property, costs of rental,
maximization of subrogation recovery.
1. Hazard - Any potential threat to public safety
and/or public health
2. Risks - Anticipated consequences of a specific
hazard interacting with a specific community (at a
specific time)
3. Emergency - An actual threat to public safety
and/or public health
4. Vulnerabilities- Factors which increase the risks
arising from a specific hazard in a specific community
(risk modifiers)
5. Disaster - Any actual threat to public safety and/or
public health were local government, and the
emergency services are unable meet the immediate
needs of the community
6. Capacities - An assessment of ability to manage to
an emergency (a risk modifier) –total capacity is
measured as readiness
7. Community - is people, property, services,
livelihoods and environment i.e. the elements
exposed to hazard
1. Slip-and-fall injuries;
2. Musculoskeletal injuries;
3. Skin reactions.
4. Respiratory illnesses
5. Security-related accidents
6. Food Poisoning
7. Elevator and escalator accidents
Hotel workers are at risk of falling and slipping because of the nature of
their work which requires them to move quickly and faster as they can to
accomplish their time the soonest possible. The persons assigned in a
pool area, lobby, or hallways are also susceptible of meeting the slip –
and – fall injuries.
Working in a hotel requires a lot of strengths and agility because of the
requirement of their work to bend and lift that could cause muscular
pains and injuries.
The skin reactions may be caused by the exposure of the hotel workers to a
variety of chemicals daily, like strong cleaning agents. Skin reactions need
early medical attention to avoid severe complications.
Hotel employees usually assigned to the Housekeeping Department could
acquire respiratory illnesses due to their exposures to infectious diseases
carried through bodily fluids like vomit, feces, and blood
No matter how careful the management of a hotel and similar establishment
is, there were still some reports of accidents that could be attributed to
accident and negligence cases like robbery and theft.
Is typically being experienced in the restaurants and similar establishment,
even in luxury hotels and resorts. It is usually caused by undercooked food,
cross – contamination in the kitchen, or other negligent preparation
measures.
Elevators and escalators which are common in the hotels, malls and similar
establishments are very beneficial to both the guests and management as it
could give them convenience in getting from one level of a building to
another
1. Accidents due to fortuitous events or acts of God
- Earthquakes
- Volcanic eruption
- Flood
- Landslides
- Erosion
- Fire
- Storm
- Typhoon
Risk Management as Applied to Safety, Security and Sanitation - THMN04H
2. Transportation accidents
- Air;
- Water;
- Land
3. Accidents due to Activities
- Pool accident
- Animal bites or attack
- Drowning
- Electrocution

Risk Management as Applied to Safety, Security and Sanitation

The natural disasters maybe categorized into three broad
groups;

1. Caused by movements of the Earth

2. Disasters related to weather
3. Floods, mudslides, landslides, and famine
Terrorism has become one of the more and more active and
threatening calamities that affect the international community.

▪ It is the use of violence or threat of violence in the pursuit of

political, religious, ideological or social objectives.
▪ It can be committed by governments, non-state actors, or
undercover personnel serving on the behalf of their respective
governments.
▪ It reaches more than the immediate target victims and is also
directed at targets consisting of a larger spectrum of society.
Two Types of Events in Risk Management

1. Negative events or risks;

2. Positive events opportunities
The following are some strategies that can be of help to manage
threats:

1. Avoid the threat;

2. Reduction of the adverse effect or probability of the threat;
3. Transfer of all part of the threat to another party;
4. Retaining some or all part of the potential or actual
consequences of a particular threat, and the opposites for
opportunities.
The different strategies of managing uncertainties can be dealt
with using the following elements in order:

1. Threat identification or characterization;

2. Assessment of the vulnerability of critical assets to specific
threats;
3. Risk determination;
4. Identification of the techniques to reduce those risks;
5. Prioritization of the measures
The following are some of the risk management principles
enunciated by the International Organization for Standardization:
1. Risk management should create a value wherein the
resources expended to mitigate risk should be less than the
consequences of inaction;
2. It should be an integral part of the organizational processes;
3. The risk management should become part of the decision-
making process;
4. It should explicitly address uncertainty and assumptions;
5. It should be placed in a systematic and structured process;
7. The best available information should be the bases of risk
management;
8. Risk management should be tailorable;
9. It should take human factors into account;
10. It should be transparent and inclusive;
11. The dynamism, interactivity, and responsiveness to change
must be evident on the risk management;
12. Risk Management should be capable of continual
improvement and enhancement
13. There is a need for continuous and periodic re-assessment of
the risk management.
Risk Management as Applied to Safety, Security and Sanitation
The following are the steps for the implementation of the risk
management process based on ISO 31000:
1. Context establishment;
2. Identification of the potential risk;
3. Risk assessment;
4. Creation of risk options;
5. Identification of potential risk management treatments;
6. Make a risk management plan;
7. Execute the plan
Classification of Risk Sources;
1. Internal; and
2. External

The following factors could be considered as determinants in

choosing a method of identifying risks;
1. Culture
2. Industry practice
3. Compliance
Risk assessment is the stage wherein the severity of the impact
of the said risk is being weighed to make the most intelligent
decisions for the full implementation of the risk management
plan.

Risk assessment is the determination of a quantitative or

qualitative estimate of risk related to a clear situation and
recognized threat (also called as hazard).
The techniques in managing risk may be categorized into the
following;

1. Avoidance (eliminate, withdraw from or not become

involved)
2. Reduction (optimize –mitigate)
3. Sharing (transfer – outsource or insure)
4. Retention ( accept and budget)
 Thank you.
☺

Reference:

RISK MANAGEMENT
For Tourism and Hospitality Management